Merger Acquisition Integration (PMI) Success Factors

An acquisition can be a valuable strategic tool to increase market share, increasing capability, or leapfrogging competitors by increasing cost efficiency. However, many acquirers fall short on fully integrating their new entities with the business which could have long-term detrimental impacts. This article outlines the critical success factors in merger acquisition integration (PMI) that can ensure a high-performing and successful integration.

PMI should start with a concise and precise definition that maps “why” the deal is in to quantifiable objectives and precise plans for each functional area. This includes cost- and revenue related synergies. PMI should also consider the cultural fit between the acquirer and the target companies, as and the nuances that are inherent in each deal’s specific context.

A key aspect to be focused on during PMI is to ensure that the CEOs of both firms dedicate the majority of their time to their core business and prioritize engagement with stakeholders/customers. To achieve this, Hess recommends identifying the people who are thought leaders and problem solvers within the target company’s team – the people that employees turn to for help – and assigning them to an task force to help integrate the company. These leaders can help reduce stress and boost morale/buy in by showing the acquired company that they care about their leadership.

While playbooks are not ideal for the fluctuating/irregular world of M&A, a basic framework and game plan can be helpful. To download a free copy of an integration checklist, visit our resources page for free.

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